Eurozone Inflation Rate Slows Down... Lowest Level in Over Two Years

The consumer price inflation rate in the Eurozone (20 countries using the euro) for September was recorded at 4.3% (expected), according to Eurostat, the official statistical agency of the European Union, on the 29th (local time).

This inflation rate is the lowest since October 2021. It decreased by 0.9 percentage points from last month's rate of 5.2%. The core inflation rate, which reflects the underlying trend of prices, also slowed significantly, dropping from 5.3% in August to 4.5% in September, a 0.8 percentage point decrease?the largest decline since August 2020.

By sector, the inflation rate for food, alcohol, and tobacco fell from 9.7% in August to 8.8% in September, and the pace of price increases eased across all sectors. Energy prices, which were a major driver of last year's sharp inflation in the Eurozone, also saw a larger decline, dropping from -3.3% in August to -4.7% in September.

These figures are interpreted as a sign that the European Central Bank's (ECB) successive interest rate hikes are effective in reducing inflation. Foreign media analyzed that this data could signal to the ECB that the rate hikes have been sufficient to achieve the inflation target of 2%. However, the ECB remains cautious about commenting on whether interest rates have peaked.